The most expensive policy that Democrats want to continue is the enhanced child tax credit that sent monthly advanced payments of $250 per child, or $300 per child under age 6 to families earning up to $150,000. The enhancement to the $2,000 base child credit was enacted in the March coronavirus relief law and expired at the end of 2021.
Democrats’ reconciliation package would extend the enhanced credit through 2022 but make it permanently refundable so families without tax liabilities could claim the full credit. That would cost $185 billion, while making the full expansion permanent would cost $1.6 trillion over 10 years, according to the Joint Committee on Taxation.
The package would also extend the expanded earned income tax credit through 2022. The one-year extension would cost $13 billion, compared with $135 billion over the decade to make it permanent.
Manchin is opposed to the short-term extensions despite retaining leverage to prevent them from becoming permanent policy.
If Democrats extend the credits through 2022, they would need to take action again this year, likely in the lame-duck session after the midterms, to prevent them from permanently expiring. They could use reconciliation again to prevent the need for GOP votes, but they would still need Manchin’s support, with the current 50-50 Senate in effect until January 2023.
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